Sept 5 (Reuters) - Verizon said on Thursday it

would buy Frontier Communications in an all-cash deal

valued at $20 billion, as the U.S. wireless carrier looks to

boost its fiber network.

Shares of Frontier Communications fell more than 9% in

premarket trading. Verizon climbed about 1%.

Verizon has offered $38.50 per Frontier share held, a

premium of 37.3% to Frontier's closing price on Sept. 3, before

reports of a potential acquisition emerged.

The acquisition, which is expected to close in about 18

months, will help Verizon better compete against AT&T ( T ) and

others by enabling it to deliver premium broadband services to

existing as well as new customers.

Frontier has 2.2 million fiber subscribers across 25 states,

which will combine with Verizon's about 7.4 million Fios

connections in nine states and Washington, D.C.

Verizon's fiber network is largely in the North East and

mid-Atlantic regions, while Frontier's coverage spans multiple

states in the Mid West, Texas, California and others.

"The acquisition of Frontier is a strategic fit. It will

build on Verizon's two decades of leadership ... and is an

opportunity to become more competitive in more markets

throughout the United States," Verizon CEO Hans Vestberg said in

a statement.

The deal is projected to generate at least $500 million in

annual run-rate cost synergies, and will add to Verizon's

revenue and adjusted earnings before interest, tax,

depreciation, and amortization growth upon closing.